Is Day Trading a Good Investment?
Although many may not realise it, there is a crucial difference between investing and day trading. While both entail the buying and selling of financial assets such as stocks, commodities and currencies, the intent and frequency of transactions differ significantly.
Investing is a long-term approach to wealth creation. Investors hold their assets for a long time and diversify their portfolio to hedge against unwanted risks. Investors usually put their money in assets like mutual funds, index funds, retirement accounts and financially sound companies that will generate consistent growth for years to come. Although many investors do leave some room for speculation, their underlying approach is longevity and stability.
Day trading, on the other hand, is buying and selling financial assets within the same trading day in order to take advantage of short-term fluctuations in asset prices. As the name implies, day trading means that all positions are closed before the end of the trading day. As you would expect, people who are active in day trading are called day traders.
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